Small users may avoid rate increase

SECOND STAGE：Part two of a three-phase rate hike the MOEA implemented in June last year to stem Taipower’s losses will see the next hike go into effect in October

Staff writer, with CNA

Fri, Aug 16, 2013 - Page 4

Households and businesses with low electricity consumption rates will be given special consideration when the second phase of the electricity price hike takes effect in October, according to the Executive Yuan.

The government is considering excluding low-consumption households and small businesses from the rate hike, or allowing only a slight increase for them, Executive Yuan Secretary-General Chen Wei-zen (陳威仁) said on Wednesday.

Chen made the remarks after Premier Jiang Yi-huah (江宜樺) said in an interview on UDN TV on Tuesday that a reasonable rate increase should be implemented, since state-run Taiwan Power Co (Taipower) has kept its rates at a relatively low level that does not reflect its costs.

The government is likely to decide on a slight increase in average power rates, after reviewing the power consumption patterns of residential units, small businesses and industries, the Ministry of Economic Affairs (MOEA) said.

The economy, people’s livelihoods and Taipower’s finances will also be taken into account, the ministry said.

Taipower spokesman Roger Lee (李鴻洲) said the company has not finalized a rate hike plan because it has not been given a clear directive to do so. However, such a plan is expected to be finalized by the end of the month.

Lee said all nine independent producers of electricity — Formosa Plastics Group’s Mailiao Power Corp, Taiwan Cement’s Hoping Power Co and seven private power firms — have agreed to revise their contracts with Taipower to reduce their prices. The move will save Taipower NT$1.54 billion (US$51.4 million) a year, he said.

Taipower has lost NT$35.2 billion in the first seven months of this year, which brought its cumulative losses to NT$228.8 billion.

However, with the higher summer electricity prices, which help limit consumption, Taipower earned NT$600 million in July.

The ministry began a three-phase rate hike plan in June last year. The first phase, which accounted for 40 percent of the total planned increase, took effect that month.

The second phase, which is set for October, will involve raising average electricity prices by 9.64 percent: industry rates will go up by 11.49 percent, commercial rates by 10.04 percent and household rates by 4.57 percent, the ministry said.

According to the ministry’s plan, about two-thirds of households and one-third of small businesses that use less than 330kWh of electricity per month would not be affected by the next price hike.